Farmers are poised to better understand the path their products take to Indian consumers, focusing on preserving quality and strengthening trade within the lucrative market.

The initiative, orchestrated by Hort Innovation and executed by KPMG Australia, aimed to chart the export journey of horticultural goods to India by pinpointing key opportunities and hurdles and proposing methods to improve the standing of Australian offerings in the market.

The study received financial support from a federal government Agricultural Trade and Market Access Cooperation (ATMAC) grant given to Hort Innovation. The funding supported the broader objective of increasing the global reach of Australian agricultural produce.

Australia currently exports to more than 80 countries, with the top six markets by value being China, Hong Kong, Vietnam, Japan, and India.

In the year ending February 2024, Australia exported $152.6m to India (112 per cent change from the previous year) and approx 31,000 tonnes (95 per cent change from previous year).

Hort Innovation chief executive Brett Fifield said India was a significant focus for produce exports.

“Growth in incomes, population, and urbanisation in India are projected to drive a substantial hike in premium agrifood consumption in the future. By 2050, significant increases are expected in import demand from India for fruit, vegetables and nuts, so now is the time for the Australian horticulture sector to better understand the Indian supply chain.

Brett Fifield, Hort Innovation chief executive

“With positive outcomes already emerging through the Australia-India Economic Cooperation and Trade Agreement, India provides immense opportunity for Aussie growers and producers, with a young, growing population who value Australian produce. The reduction in tariffs as set out by the AI ECTA will enable the Australian horticulture industry to supply India’s growing food demand.”

A growing market

India was the second largest producer of fruit and vegetables in the world, but it was also an expanding market for imported products. Due to an increased focus on nutrition and health, Indian consumers were eating fresh fruit and vegetables more regularly.

According to Mr Fifield, this was something Australian exporters could benefit from as there was increasing demand for Australia’s healthy, fresh, and safe produce in India.

“There is a strong market for our nut exports, with Australia ranking second in market share of India’s almond imports. Another example is Hass avocados who received market access in 2023 and have already exported over 300 tonnes,” Mr Fifield said.

“Currently, Australia has market access into India for nuts (almond, macadamia and pistachio), fruit (apple, avocados, blueberry, cherry, citrus, dates, pear, summer fruit (apricots, nectarines, peaches, plums and table grape) and vegetables (chives, leeks, onions and shallots).”

Brett Fifield, Hort Innovation chief executive

“So the time is ripe for our exporting industries to capitalise on trade opportunities with India, and this report will provide us with a roadmap on where to focus our efforts and drive value for our sector.”

NSW Farmers Board member Chris Stillard said, as an exporting nation, any opening of markets would be welcomed by Australian farmers.

“With India’s population and growing economic economy, we would be more than happy to work with India to supply our clean and world-class produce,” Mr Stillard said.

“Obviously our grains and pulses would help meet India’s basic needs but getting access to their off-season (Northern Hemisphere) horticultural markets would be of great benefit to our growers. India hasn’t really been on my radar, as Asian markets have been my focus. But India would definitely be an initiative we would welcome.”

Federal focus on fresh food trade

Last year, Minister for Agriculture, Fisheries and Forestry Murray Watt led a delegation to India with 12 senior members of Australian agribusiness to promote high-quality produce and push for greater trade ties between the two countries.

“With positive outcomes already emerging through the Australia-India Economic Cooperation and Trade Agreement, India provides immense opportunity for Aussie growers and producers, with a young, growing population who value Australian produce.”

Minister for Agriculture, Fisheries and Forestry, Murray Watt

The avocado industry was ready to do business with India; Avolution chief executive Antony Allen claimed; with early exports to India, they were already learning much about the market and customers.

“This study offers deeper insights that will help grow our partnership with India further. We’re gearing up to make our mark on the Indian market after last year’s federal government announcement that Australian Hass avocados can now be exported to that market,” Mr Allen said.

“We have got levy-funded scheduled for May to deliver positive messages about Aussie avocados, sharing their virtues in terms of taste, nutrition, and versatility.”

Mr Fifield claimed Australian exporters could also benefit from our complementary agriculture season, existing trade reputation for fresh produce, and relatively close location allowing for faster shipping and fresher produce.

“One of Hort Innovation’s core imperatives is to accelerate local and global demand, and this project will set industry up for future success by equipping them with the intel they need to play in the Indian market,” Mr Fifield said.

According to Mr Stillard, the great news was that Australian exporters could gain advantages from our reputation as clean and safe food producers.

“Australian premium produce is renowned around the world, and we would be ready to take on the challenge of a new and relatively close market in India that we could access,” he said.

If you enjoyed this story on Australia’s horticulture trade with India, you may like to read more stories about international trade.

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Last weekend, Australian and EU officials met in Osaka to discuss how to move forward, leaving many producers concerned for their future.

Years-long negotiations

Since negotiations began five years ago, Australia has been seeking access to EU markets. Currently, accessing this market of nearly 446 million people is difficult due to heavy tariffs and quotas. The EU is Australia’s third-largest trading partner, with a market worth US $16.6 trillion. Easier access to trade could have a positive impact on the success of Australia’s export market. 

In return, the EU is requesting investment access to our critical minerals industry. Australia supplies around 50 percent of the world’s lithium, as well as several rare minerals used in batteries and other important products.

The G7 Trade Ministers met in Osaka last weekend. Despite farmers repeatedly warning the Albanese Government that the existing deal on offer was one-sided, many were concerned they would sign a free trade deal.

While the Australian agriculture sector had long supported a free trade agreement with the European Union that would deliver access to this large, high-value market, it had to deliver value for both parties. Negotiations did not reflect well on this requirement. 

According to Australia’s Trade Minister Don Farrell, major negotiations were concerned with increased market access for Australian beef, lamb and sugar. The EU proposed low quotas, citing the recent Australia-UK trade deal in 2021, which included a large uptake of Aussie beef and sheep meat. While the EU argued that this impacted European producers by reducing their market share in the UK, leading Australian negotiators were still hopeful that better conditions for our producers could be achieved.

At a cross-roads

Fortunately, it was confirmed earlier this week that the Osaka trade negotiations were called off after negotiating bodies concluded it wasn’t a fair deal for Aussie farmers.

The National Farmers’ Federation has congratulated Trade Minister Don Farrell for turning down an EU trade offer that would have disadvantaged our producers.

Speaking following the briefing of industry representatives in Osaka, NFF President David Jochinke said the Minister had made the right call for Australia.

“Today’s decision was a hard one, but ultimately it was the right one. We thank Minister Farrell and Agriculture Minister Murray Watt for standing by Australian farmers and walking away from an unacceptable offer,” Mr Jochinke said.

“It’s disappointing the Europeans weren’t willing to put something commercially meaningful on the table. This was always going to be a tough negotiation with no guarantee an outcome.

“What was on offer would have hardwired protectionism into our trading relationship with Europe for another generation. It would have locked our farmers in at a disadvantage to competitors in New Zealand, Canada and South America.

“Australia has always been a champion for open and fair trade on the world stage. Today’s decision by Minister Farrell continues that legacy.

“Ultimately, we all want a deal with the EU that benefits both sides. We encourage the Government to maintain dialogue with the EU to work towards this if and when the time is right.

“It should be clear though to the EU from today’s events that Minister Farrell isn’t willing to throw Aussie farmers under the bus just to get the deal done.

“He’s held firm to protect Australia’s interests in the face of intense pressure from EU negotiators, and for that we’re incredibly grateful.

“We’d like to thank Australia’s team of negotiators and the team from the Department of Agriculture, Fisheries and Forestry who have worked tirelessly to produce a meaningful outcome, we hope those efforts will be rewarded with a deal in the future,” Mr Jochinke concluded.

To learn more about the EU trade agreements, click here.

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But the EU’s tough stance on agricultural imports – tariffs of 14.2 per cent on top of quotas for 142 products – has impeded the ability of Australian farmers to grow trade with the block.

This year marks five years since Australia travelled to the EU’s headquarters in Brussels for the first time, to hammer out a free trade agreement (FTA) and unlock trade access for agricultural products like beef, lamb, sugar, cheese, rice, wine and horticulture – and consequently reduce our reliance on China for trade.

The EU is also keen to reduce its reliance on China for trade. It sees Australia – the world’s largest producer of lithium and an important producer of cobalt and nickel – as an attractive and reliable source of rare metals for its electrification revolution. Australia’s vast potential to become a leading exporter of renewable energy made from wind, sun and hydrogen is another big drawcard for the EU as it weans itself off Russian oil and natural gas.

Proponents of the FTA hoped negotiations would conclude in July, when Australia’s Trade Minister Don Farrell flew to Brussels to ratify the deal. But after two days of talks, the two sides failed to see eye to eye.

The biggest sticking point during the final round of negotiations was the EU’s demand for geographical indications to legally protect the names of distinctive European products. It wants Australia to give up naming rights to prosecco, parmesan, mozzarella, feta, kalamata olives and scores of other foods and beverages we produce, just as the Canadians did to get their FTAs with the Europeans over the line. But as a nation of immigrants that shares Europe’s attachment to these products, Australia is refusing to bend the knee.

“I have been in the room with prosecco makers who have simply burst into tears at the prospect of losing access to that name, because they feel so strongly attached to the name,” Farrell said in a speech to the National Press Club on his return to Canberra. “This is not just an economic interest issue for Australia. It’s also an emotional issue.”

While hopeful for a FTA between Australia and the EU that “benefits everyone” involved, National Farmers’ Federation CEO Tony Mahar applauded Farrell for rejecting what he described as a “sub-standard deal”. NSW Farmers is in accord, as is the Australian Dairy Industry Council, which claims its members would lose close to $100 million per year if the EU gets its way with geographical indications.

“If introduced, this would block Australian companies from using product names such as feta and parmesan. Such a move is expected to result in lost sales, which could cost the industry up to $95 million a year,” Council chair Rick Gladigau said in a statement. “Geographical indications also hamper the ability of new Australian entrants to the market and goes against the Australian dairy industry’s support of free and fair trade.”

Rick also took a swipe at the apparent motive behind the EU’s demand. “The geographical indications claim is really just a way of facilitating greater access to the Australian market for subsidised EU products while stifling genuine competition for Australian products. The claim would also impact sales, profitability and productivity of Australian dairy businesses,” he said in the statement.

Beef producers and representatives in Australia are more anxious to break the deadlock. With an annual market valuation of $3.2 billion, beef imports to Europe are considerably more valuable than the global average. However, Australia only supplies 4 per cent of EU beef imports, more than two thirds of which go to one country: the Netherlands. Their share of Europe’s $1.7 billion sheep meat import market is even more marginal at 3.5 per cent.

“Signing an FTA will enhance Australian-EU trade across all sectors included in the agreement, improving investor confidence, and fostering economic growth by creating a more competitive environment,” Meat and Livestock Australia said in a statement.

Andrew McDonald, chair of the Australia-EU Red Meat Market Access Taskforce, described the negotiations as “a once-in-a-lifetime opportunity” that “will provide benefits to European consumers and the Australian red meat supply chain alike. [But] the EU has made it very clear that the protection of certain geographical indications is of utmost importance to their FTA ambitions.”

A senior lecturer in the Faculty of Law at Monash University, Elizabeth Sheargold told the ABC earlier this year that Australia’s position over geographical indications was just as firm. “Australian producers have really effectively lobbied to get this issue front and centre for government, and to make it a core part of our negotiating approach on this treaty,” she said.

Australia and the EU are natural partners, with a shared commitment to democracy, human rights, a rules-based international order and free and open access to global markets. Yet with both sides resolute over the issue of geographical indications, it’s a case of ‘who’s going to blink first’: the EU, which has said a FTA with Australia could add up to $6.5 billion to its GDP by 2030, or Australia, for which the deal has a potential value of $140 billion?

The odds suggest the EU will get its way, and producers of feta cheese and kalamata olives in Australia will have to rebrand, relabel and re-educate consumers. Farrell seemed to indicate as much while speaking to reporters at a park in Brussels after the most recent negotiations failed. “I’m optimistic that with some goodwill, some hard work, some perseverance, we’re going to get there,” he said.

SOLVING AUSTRALIA’S FERTILISER PROBLEM

The world relies on Russia and its only European ally, Belarus, for a quarter of its fertiliser, according to the US Food and Agriculture Organization.

That’s a serious problem for a country like Australia, which imports 90 per cent of its urea and which saw the cost of fertilisers skyrocket following Russia’s invasion of Ukraine.

Indeed, NSW Farmers economist Brendan O’Keeffe comments that “prices have increased by up to 100 per cent since mid-2021”.

Fertiliser prices have fallen by a third from their peak last year as countries like Canada, now the world’s largest producer of potash, have stepped into the gap in the market left by Russia, whose exports are not blocked by embargoes but remain curtailed through disruptions to ports, shipping, banking and insurance.

But with China, the largest producer of urea, restricting fertiliser exports, fertiliser prices are still far above the long-term average, and pushing up the cost of groceries.

The only way prices are going to level out, Brendan told the Parliamentary Inquiry into Food Security earlier this year, is through “strategic investment in localised production of these inputs”. And now it seems he’s going to get his way, following an announcement in July that the world’s largest urea plant is going to be built in West Australia’s Pilbara region.

The $6 billion Ceres plant will first transform natural gas for ammonia and then into urea. Once completed in 2027, it will produce 2.3 million tonnes of urea per year, bringing our reliance on imported fertilisers to an end.

The post Fortress Europe: negotiating EU trade demands appeared first on The Farmer Magazine.

Australia has seized the opportunity presented by China’s decision to lift tariffs on barley imports to push for the elimination of all remaining trade restrictions between the two countries. The move comes as the commercial ties between Australia and China move once again towards normalisation.

China’s Ministry of Commerce announced on Friday that the anti-dumping and anti-subsidy tariffs on Australian barley would be scrapped, effective immediately, putting an end to a three-year period during which these tariffs had cut off a significant portion of the A$1.5 billion ($986.25 million) annual trade between the two nations. In fact, the tariff imposition had prompted Australia to file a case against China with the World Trade Organization (WTO).

This decision on barley already follows the resumption of trade in other products, such as coal and timber this year. However, some Australian products – notably wine – still face tariffs, and there are also unofficial restrictions on exports of lobster and meat from certain abattoirs to China.

The next step toward normalisation

Australian Trade Minister Don Farrell welcomed the removal of the barley tariffs and expressed the plan to use it as a kind of stepping stone.

“We intend to use this process (barley) as a template for resolving the issue in respect of wine, which is still ongoing… as we seek to resolve all of those outstanding issues,” he said when interviewed directly following the announcement.

The relationship between Australia and China had turned sour during the pandemic in 2020, when Australia called for an official inquiry into the origins of COVID-19. Beijing retaliated in trade, imposing anti-dumping duties on Australian wine and barley.

Since then, Australian producers and exporters made do with barley markets in the Middle East, as Chinese buyers replaced Australian barley with grain exports from Canada, France and Argentina.

Tensions eased somewhat as the Albanese government came into power, and the Prime Minister has announced a possible trip to Beijing later this year in order to further smooth relations and end the trade dispute between the two countries, though no date has been set.

China’s decision to drop the barley tariffs was influenced by a robust beer market demand and insufficient domestic barley supply to meet consumption needs, according to the Chinese Ministry of Commerce.

The market reacts back home

Since barley is such an important rotation crop for Australian growers, a more stable outlook on exports is particularly welcome news to industry associations.

Grain Producers Australia responded immediately to the news with a statement in which its Chair, Barry Large, announced the re-opening of the Chinese barley market as a positive move and real win for Chinese consumers and industry, as well as for Australian grain producers and exporters.

“We thank and acknowledge the work of both governments in contributing to this positive outcome through an expedited process to reach a resolution which has been significantly shorter than if the WTO process continued,” he said.

“This resolution will allow Australian producers to re-commence selling and exporting our high-quality barley to China again.”

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Alongside a broader economic crisis in Argentina caused by decades of fiscal mismanagement and entrenched corruption – which saw inflation hit a three-decade high of 95 per cent last year – the drought is projected to erase 2.2 per cent of GDP this year, according to the Rosario Stock Exchange.

That translates to $21.5 billion in lost agricultural export earnings compared to 2022, when Argentina earned $86 billion in farm exports, predominantly from grains. Argentina is, or was, the world’s largest exporter of soybean oil and meal, the second- largest exporter of corn and the seventh-largest exporter of wheat, lemons and limes.

In the ‘Pampa Húmeda’ (Humid Pampas), Argentina’s breadbasket, half of the soybean crop has already been lost due to drought. And while a fortnight of rains in late January will help limit losses, at least half of this region remains in drought as ongoing above-average temperatures unbalance the effect of rains.

“I am 48 years old, and this is the worst drought I have seen in my life,” wheat farmer Christian Olaizola told Germany’s DW News. “We have seen precipitation levels decrease and decrease over the past three or four years, every year a little less. We had to farm our wheat with practically no water, maybe 5 or 7 millimetres of rain, not more,” he said, adding that he expects the harvest on his 80-hectare property to come in at one-third of
usual levels this year.

Cristian Russo, head of estimates at the Rosario grains exchange, added in an interview with Reuters: “We have to prepare for the worst scenario for the last 20 years in this grain campaign of soy and corn. We are at a point where things look very complex.”

Government response

Agriculture is one of the few bright spots in Argentina’s broken economy, accounting for nearly two-thirds of export earnings. As such, it is too important to fail. The government has introduced a raft of measures to ensure farmers will still have a roof over their heads when the drought finally breaks.

Argentina’s central bank is offering farmers more flexible terms on the non-payment of loans and subsidised lines of credit. It has also opened a small relief fund worth $38 million for farmers, and announced the suspension of advance income tax payments in addition to tax exemption for beef farmers who undersold cattle due to a lack of affordable feedstock.

But at the same time, it is also making things harder for farmers by extending a partial ban on beef exports to ensure continuity of inexpensive domestic supply.

According to the US Department of Agriculture, Argentina is the sixth biggest beef producer in the world, accounting for 5.19 per cent of global production. Australia, in eighth position, accounts for 3.28 per cent of global supply. However, most of our beef is produced for export (72 per cent) whereas in Argentina, 71 per cent of beef is consumed domestically.

It’s not because they have a population nearly double the size of ours. It’s because Argentinians eat more red meat than any other country on the planet: 39.9 kilograms per person per year, compared to 19.2 kilograms in Australia.

“That’s why they introduced export bans in the first place. Beef is such an important part of
their culture that the population would not bear any significant price rises,” explains Andrew Cox, General Manager for international markets at Meat & Livestock Australia (MLA).

Introduced in May 2021 as a blanket embargo on a quarter of total beef production exports, the bans had an immediate negative impact, with exports dropping by 36 per cent. Yet the following month, it was announced that only certain cuts would be banned and that restrictions would not apply to high-quality cuts destined for the EU, nor to quotas set for the US and Colombia. In October that year, the export cap was lifted for China, which accounted for more than two-thirds of exported volume the year before.

“Also keep in mind that Argentina exports most of its beef to China, and even then it’s just a drop in the ocean. Let’s not forget the political environment in China has seen suspensions put on several major beef producers in Australia. In the last two years, our exports to China have shrunk and they’re unlikely to grow until the political issues are resolved.”

Andrew Cox, MLA

The current ban, which has been extended until the end of 2023, applies to seven cuts popular with the domestic market, as well as whole and half carcasses.

Nothing to see here

Most economic changes produce winners and losers, and that maxim also applies to changes in trade. This begs the question: is there an opportunity for Australian farmers to help fill gaps in the global markets created by Argentina’s drought and export bans?

The short answer is no, and you only need to look more closely at two major Argentinian commodities to see why.

“The total size of the global soybean market is about 360 million odd tonnes per year, and Argentina and Brazil account for about 100 million tonnes between the two of them,” CEO of the Australian Oilseeds Federation, Nick Goddard, says.

“Australia only grows 50,000 tonnes, so when you put us in the global context, we don’t even register.

“Most of the soy we produce are varieties suited to foods like soy milk, tempeh and tofu – and nearly all of it is consumed domestically. We do have opportunities to grow soybeans for export into Southeast Asia where we have a good point of difference as our soybean is purely non-GM.

“But at the end of the day,” he explains, “it’s an opportunistic crop for us. If the price of sugar is low, sugar cane farmers in the Northern Rivers region will plant some soybeans as it works well as a rotation crop because the price of water there is currently low. But when water becomes more expensive, it will make more sense to plant cotton or rice.”

“What is happening now in Argentina,” he says, “is because of seasonally dry conditions. And as soon as it gets wet over there it will become dry here. So I do not see any real opportunity for Australia to become a major exporter.” But what about selling the world some of the beef that Argentina cannot – a trade Australia excels in?

“Given the type of product Argentina exports and the price it sells it for, the gap in the market would be picked up first by other South American producers like Brazil,” says Andrew.

“Also keep in mind that Argentina exports most of its beef to China, and even then it’s just a drop in the ocean. Let’s not forget the political environment in China has seen suspensions put on several major beef producers in Australia. In the last two years, our exports to China have shrunk and they’re unlikely to grow until the political issues are resolved.”

Even if that were not the case, the MLA doesn’t believe it makes good business sense to sell more Australian beef to China.

“The story for the last couple of years for Australian agriculture has been about diversifying
our exports to avoid over-reliance on any single market like China,” Andrew says.

“Australian beef exports have already been well-diversified compared to other commodities like wine and barley. Our focus is growing markets like India, South Korea and Japan, and the MLA has now got people on the ground in Saudi Arabia, Vietnam and Thailand. So, I do not see how events in Argentina will result in any large quantifiable opportunities for Australian beef.”

Gap in the market
Argentina’s export ban on beef production for 2023 means there is now a gap in the global market. However, Australia is in no position to fill it due to a focus on diversifying our exports and avoiding over- reliance on any single market, such as China – Argentina’s main export market.

The post Crying for Argentina appeared first on The Farmer Magazine.

It’s a record amount of grain to sell, and farmers will need top prices to recoup a record investment into growing the crops. More than 80% of respondents to a recent Grain Producers Australia survey said last year’s cropping production costs were ‘significantly higher’ compared with previous years.

NSW Farmers Grains Committee Chair, Justin Everitt, said growers are receiving higher prices for wheat compared to last year, but reports of farmers in other countries getting more bang for their buck continue to frustrate Australian farmers in 2023.

“We have been seeing international prices way above what we have been receiving. Canadian farmers were getting up to $150 per tonne more for canola last year,” Justin says.

“We have had some of the lowest prices in the world for the past two years for canola and wheat. Some of that is due to supply and demand and climatic factors, but there is definitely room for improvement in the efficiency of the supply chain in Australia.

“I know, for example, that they haul 15,000 tonne trains across Canada compared to the 5,000 tonne capacity trains here.”Expansion of container grain exports at the Port of Newcastle and the Inland Rail project are tipped to improve the shifting of grain to market for farmers in NSW, but Justin said more work is needed to increase transparency across the supply chain. “We need to work out where all the congestion is coming from in getting it from storage to port.”

Inquiries into the industry

NSW Farmers has asked Federal Treasurer Jim Chalmers to establish two inquiries to enable critical supply chain efficiency improvements and increased transparency for the grains sector. The first is an in-depth ACCC inquiry into the Australian grains industry to address concerns raised by growers about the underpricing of Australian grain when compared to those in other grain producing countries. NSW Farmers economist Brendan O’Keeffe said there are market failures potentially occurring across the supply chain due to a lack of competition, but a lack of data exists to fully diagnose the extent of inefficiencies.

“Monopolistic behaviour is potentially occurring due to large barriers to entry at the bulk handling stage, such as the high cost of rail access and significant capital investment required to set up facilities,” Brendan says. “Other issues leading to market inefficiencies include a lack of supply chain coordination, insufficient cost recovery of rail, and underinvestment in road infrastructure.” Brendan said the ACCC should use their powers to compel businesses across the supply chain to provide cost and revenue data which would then show markups and therefore evidence of monopoly pricing. “This could validate growers’ concerns that they are receiving prices lower than they would in an efficient market setting.”

Check out our wheat port code

In addition to the ACCC Inquiry, NSW Farmers has requested that a review of the Wheat Port Code be commenced at the same time.

The Wheat Port Code regulates the conduct of port terminal service providers and seeks to ensure that exporters of bulk wheat have fair and transparent access to port terminal services.

In May 2018, the ACCC’s submission to the previous Port Code Review identified that exporters of all bulk grains should have fair and transparent access to port terminal services.

The ACCC also recommended that the code be extended to apply baseline regulatory access arrangements to vertically integrated upcountry storage and handling networks.

Recommendations like these from the first Code review have not been implemented, and the ACCC said in September last year that “the second Code review should commence as soon as practicable within the next 12 months”.

The ACCC has reported on bulk grain exports every year since the monopoly powers of the Australian Wheat Board (AWB) were removed in 2008.

The latest report showed a decline in the average number of exporters per port, while at the same time there is a growing number of new and smaller port facilities.

“While outside the remit of the Code, the ACCC notes that stakeholders continue to express concern around broader supply chains,” the ACCC said in a statement.

“The ACCC has reflected these concerns in its Bulk Grain Ports monitoring reports for several years. The ACCC considers that long-held stakeholder concerns, such as those in relation to broader supply chain issues, as well as emerging concerns should be considered as part of the second Code review.”

“To get to the heart of the matter, we believe any investigation should include the end-to-
end grains supply chain nationally, originating at farm gate through to export and domestic channels.”

Shona Gawel, CEO GrainGrowers

GrainGrowers call for investigation
Research that estimates grain farmers lost $2.6 billion in the value of their wheat in the 2021-22 marketing season has sprouted more calls for action on transparency in grain pricing.

GrainGrowers has requested a ‘in-depth investigation’ from the Australian Government in response to its research paper highlighting large pricing anomalies between Australian and
international grain markets.

“Our research highlighted enormous anomalies accepted by grain and oilseed growers in the winter cropping cycle for 2021-22,” said GrainGrowers CEO Shona Gawel.

“At face value, in wheat alone, the value loss to grain growers is approximately $2.6 billion. The enormity of this loss is not sustainable over the longer term should the issue re-surface, as it seriously impacts overall farm viability.

“Growers have been raising the issue for some time, and the report provides quantitative evidence supporting the need for government to perform an in-depth investigation.”

GrainGrowers has outlined a range of options for the government to consider, including backing the request from NSW Farmers for an ACCC pricing inquiry. Other options are a Senate Inquiry and independent review or a departmental review by the Department of Agriculture, Fisheries and Forestry.

“Given the issue’s importance, we believe it is appropriate for the government to decide and commence what it considers to be the most appropriate course of action to address the identified concerns.”

Shona said that unless the drivers behind these anomalies are better understood and addressed, they will continue adversely impacting growers and the wider industry.

“To get to the heart of the matter, we believe any investigation should include the end-to-end grains supply chain nationally, originating at farm gate through to export and domestic channels,” she says.

“The investigation is not a finger-pointing exercise at any individual market participants, but rather a much-needed review in the interest of all players in the value chain.

“A thorough investigation will reveal if there are any supply chain bottlenecks and other barriers for trade participants. This approach, in turn, will help inform the government on future nation building supply chain investment, increasing the capacity of
industry to export larger grain crops in future.”

The post Competition not going with the grain appeared first on The Farmer Magazine.

This brave act spoke volumes about the defiance of the Ukrainian people and the hell they were about to unleash on the Russian invaders, who thought they would overtake the country in a matter of days.

It also highlighted the iconic status of sunflowers – soniashnyk in Ukrainian – that have been farmed commercially in Ukraine since the 18th Century and are the country’s unofficial symbol. When Ukraine gave up its nuclear weapons to the Russian Federation in 1996, the defence ministers of both countries and the US planted sunflowers at the country’s largest missile base. And the Ukrainian flag? It represents a blue sky over a yellow sunflower field.

More than a symbol

Sunflowers are crucial in fuelling Ukraine’s economy, while Ukrainian sunflowers, in turn, help fuel the world. Before the war, the country produced one-third of the global sunflower oil supply and two-thirds of sunflower meal, a key input for animal feed.

But the invasion threw a spanner into the trade and sent the price of sunflower products – already inflated by Covid-19 supply chain issues – to the moon.

A month before the Russian invasion last year, sunflower oil was trading for US$1,348 per tonne, according to Trading Economics. Four months later, it hit a historical high of US$2,400 per tonne – spurring speculation that farmers in Australia, the 44th largest exporter of sunflower seeds in the world, could capitalise on the event.

Sunflowers have been grown in Australia since 1974 and cover 3,000 hectares of agricultural land, primarily in northern NSW and southern Queensland but also in irrigation areas in southern NSW, the Riverina in Victoria as well as the Ord River catchment area of Western Australia.

But the sunflower industry boom never transpired here.

Boom or bust

“It was the wrong time in the year for us,” says Nick Goddard, CEO of the Australian Oilseeds Federation. “Sunflowers are planted at the start of the summer, so we missed the boat to capitalise on the immediate global shortage and price bump. As the year went on, the Ukrainians were able to export the seed by land after the ports closed, so the huge deficit in sunflower oil has somewhat been eased.”

This was obvious at the Isaccea-Orlivka crossing on the Romanian-Ukrainian border last year in June, where a kilometres-long queue of trucks waited to cross into Romania. Drivers had been waiting up to 10 days, and they were angry.

Another reason why the Australian sunflower industry boom never happened, Nick explains, is “large plantings of sunflower crops in Europe. Their summer starts in April or May, so they were well positioned to take up some of that buffer.

“Then there’s the fact that it’s a big challenge for growers in Australia to find someone to process their seeds into oil because there’s not a single dedicated sunflower crusher in the country; they’re all tooled for canola oil because it’s grown here so abundantly in our country.

“Some of the crushers did the numbers earlier on in the year but found out it wasn’t viable, even when the price for sunflower oil was so high. And by October or November, the start of the planting season, the huge price premium had diminished,”

Nick adds. “So, by the end of the year, we saw a pretty much typical sunflower crop in Australia.”

Global prices for sunflower oil have continued to fall, to the chagrin of the sunflower industry, losing another US$195 a tonne or 15 per cent in value between the start of 2023 and mid-February 2023.

Trading Economics estimates the trend will continue, with the price nearing US$1,000 per tonne by the end of the year.

Sunflower industry responds with tourism

There has, however, been one small but noteworthy change to the sunflower industry sector in Australia – a response to the thousands of tourists who trespassed on sunflower fields late last year to snap photos of the bright yellow flowers for their social media feeds. Instead of calling the cops or shooing photo hunters away, some farmers turned the problem on its head by remodelling their sunflower fields into agritourism businesses.

“There are so many people who want to come and see sunflowers, but the last thing any farmer wants is to have people near their crops because of damage and the biosecurity risk,” says Roger Woods of Warraba Sunflowers.

“So, we put two and two together and a couple of years ago planted a crop specifically to let people come and interact with them. It’s $10 for adults, $5 for teenagers and kids under five are free.”

The post The sunflower boom that never happened appeared first on The Farmer Magazine.

Canegrowers across the NSW north coast are banking on near record sugar prices to help fund a long-term flood recovery process.  

The world sugar price has swelled to its highest level in more than 40 years, reaching more than 24.50 US cents per pound in April or beyond $800 per tonne in Australian dollars.  

“The world sugar price has continued to rise over the last six months,” said Sunshine Sugar CEO Chris Connors.

“Sunshine Sugar is hedging into this market with an aim of delivering over $700 per tonne of sugar for the next two years. At these prices growers will be receiving well over $50 per tonne for cane.”

“It is timely as the floods have caused significant damage not only in the mills but also in the fields.”

Sunshine Sugar owns and operates sugar mills in northern NSW at Harwood, Broadwater and Condong and a refinery co-located at Harwood. The Australian owned business is partnership between the grower-owned NSW Sugar Milling Co-operative and the Manildra Group.

NSW Cane Growers Council chair Ross Farlow said while the market outlook is “outstanding”, farmers in NSW will have to wait until at least next year to tap into the windfall.

“They are once in a generation sugar prices, but they will be out of reach for most farmers in NSW this year.”

The 2023 cane harvest season will start in late June and Ross says the yield forecast is trending in the opposite direction to world sugar prices.

“We will be at least a million tonnes of cane down this year across the three mill areas. The Broadwater mill is expected to be down by about 60 per cent decrease.”

NSW Cane Growers Council chair Ross Farlow

“It is still full-on recovery mode for farmers, particularly in the Richmond and Tweed valley regions. That means we need ongoing support to keep farms viable and enable farmers to take advantage of the good prices.”

The cane crop forecast for Queensland is much brighter.

Queensland’s 2023 sugarcane crush is just weeks away, and Canegrowers Chairman Owen Menkens says the spike in the world sugar price, coupled with a drop in fertiliser prices, is setting up 2023 as a bumper year for Queensland’s sugarcane industry.

 “Just two years ago the sugar price languished below $400 per tonne, not even covering the cost of production for many growers. It was a pretty grim time,” Mr Menkens said.

 “Fast-forward to today and that figure has doubled, with the prompt price hitting highs of $804 per tonne in mid-April.

 “The last time we saw the prompt price at $800 was in 1980, more than 40 years ago, so growers are understandably excited.”

Learn more about the historic NSW sugar industry here.

The post Sweet outlook for sugar prices appeared first on The Farmer Magazine.

Substantial increases in wheat and cotton exports helped forge a record $3.4 billion of export sales to Vietnam in 2021-22, and demand for Australia’s high-quality beef is tipped to continue to grow as consumers become wealthier.

Vietnam’s appetite for Australia food and fibre has also extended to increased sales for dairy products, seafood and premium horticultural produce. 

Australia will be celebrating the 50^th anniversary in Vietnam throughout 2023 with a program covering all aspects of Australia-Vietnam relations. 

This includes agriculture, education, tourism, climate cooperation, skills as well as innovation and equality. Australian produce will be showcased through Taste of Australia events.

Prime Minister Anthony Albanese has marked the anniversary with an announcement of Australia and Vietnam’s shared intention to elevate the relationship to a Comprehensive Strategic Partnership. 

“This announcement reflects the high level of mutual strategic trust and ambition in the relationship and will place Australia in the top tier of Vietnam’s closest partners.”

Anthony Albanese, prime minister

Cottoning on

Australian grown cotton has already hit top tier in the Vietnamese fashion world. In the second half of 2021, Australia became the largest supplier of cotton to Vietnam, overtaking the United States, with export sales of around $812 million. 

Vietnam is the world’s second largest importer of cotton – buying around 6.8 million bales each year.

Chair of the Australian Cotton Shippers Association, Matthew Bradd, tips Vietnam will be the top market for Australian cotton again in 2023. 

The bulk of the 2023 cotton exports will begin in May. “Vietnam was already an important export market, but has become our number one since China imposed soft import bans,” Matthew said. 

“We have seen a massive uptake of new domestic customers in Vietnam with the 2022 crop. I was there late last year, and the feedback was clear: Australian cotton is by far the best to purchase. We have taken a lot of market share away from the US.” 

Matthew Bradd, Chair of the Australian Cotton Shippers Association

Australian company Good Earth Cotton – which produces one of the world’s first carbon-positive cotton products – is adding another chapter to Australian cotton’s success story in Vietnam this year. 

It has partnered with a leading Vietnamese fashion company, Fashion Enterprise, that plans to increase the processing volume of carbon-positive cotton to 16 million kilograms in 2023.

Fashion Enterprise is also looking to establish the first merino wool spinning factory in Ho Chi Minh City. 

Australian wheat farmers have also benefited from strong diplomatic ties. Wheat is not commercially grown in Vietnam, and Australian wheat has become the preferred ingredient in bread, noodles and wheat biscuits. 

The increased use of wheat in animal feed is also driving demand for Australian wheat, according to Austrade. 

Demand for feed wheat is forecast to grow by 30.1 per cent, from 1,250 kilo-tonnes (kt) in 2021 to 1,626kt in 2031. The growing demand for feed wheat stems from growth in the local livestock industry and its wider use in aquafeeds for Vietnam’s large aquaculture industry. 

MLA beefs up marketing in Vietnam 

Meat and Livestock Australia’s (MLA) general manager of international markets, Andrew Cox, said the Vietnamese beef export market is still in an ‘infancy stage’. 

“Our beef exports to southeast Asia have traditionally been dwarfed by countries further north like Japan, Korea and China, but the whole region holds a lot of great opportunity for Australian beef exporters,” Andrew said. 

“Vietnam, in particular, is an exciting market for Australian beef. It’s fast growing and now has a population of almost 100 million, many of which are young and growing in wealth. 

“Plus, we have had some recent market access improvements, particularly on chilled beef. Five years ago, we were exporting inconsequential amounts of chilled beef. Last year we sent 200 tonnes.

“We already export around $150 million worth of beef per year to Vietnam. It’s still small, but there are real opportunities to grow that as the country matures, retail standards improve and consumer demand increases for quality beef.” 

Andrew Cox, Meat and Livestock Australia’s (MLA) general manager of international markets

Fish, pork and poultry still top the list for choice of meat, but beef consumption is on the rise. 

The OECD-FAO forecasts Vietnam’s beef consumption to rise 15.1 per cent from 12,050kt in 2021 to 13,875kt in 2031. This 1,825kt increase is almost double the 944kt of beef Australia exported to the world in total in 2021-22.  

These types of numbers have inspired MLA to invest more in marketing, including two new market development managers based in Hanoi and Ho Chi Min City.

Vietnamese chefs were also bought to Australia to check out supply chains for beef and lamb and the food service sector has been targeted with a social media campaign promoting Aussie beef. 

Andrew said beef exporters had also selected Vietnam, along with Thailand and Saudi Arabia, as a key market for MLA to invest in as part of an Agricultural Trade and Market Access Cooperation (ATMAC) grant from the Federal Government. 

“The good thing about Vietnam on beef is that we are not trying to introduce something new to the culture,” he said.  

“They love beef and eat it more frequently than any other country in the region. They have their traditional dishes like Pho, but consumers are increasingly interested in Korean BBQ dishes, hotpots, steakhouses and grill restaurants. I had an Australian Wagyu Pho on my last visit to Vietnam, so there is premiumisation happening within traditional dishes.” 

Andrew Cox, Meat and Livestock Australia’s (MLA) general manager of international markets

Andrew said the retail supply chain in Vietnam is becoming more sophisticated, which is creating opportunities for Australian boxed and chilled beef in the market. 

“The vast majority of beef is still sold through wet markets, and it is still important for Australia’s live export trade.

“On the boxed meat side, there are a lot of low-cost suppliers from India and Brazil. We are mainly competing with Canada and the US for market share.” 

In 2021, Australia accounted for 83 per cent of the fresh or chilled bovine meat exports to Vietnam and 15.2 per cent of frozen bovine meat exports.

Andrew said sheep meat consumption remains low but is growing steadily, albeit from a low base.

Dairy consumption in Vietnam per capita remains low. For example, milk consumption per capita in 2017 was only 8.7 litres, compared to China at 24.1, India at 106.1 and Australia at 219.5 (Source: Our World in Data 2022). However, as consumers become wealthier and the population ages, dairy consumption is forecast to increase.

Most growth in dairy consumption is predicted to come from an increase in skim milk powder consumption.

If you enjoyed this piece on Vietnam ag exports, you might like to read this piece on our trade agreements with India.

The post Golden years for Vietnam’s ag exports appeared first on The Farmer Magazine.

With the worldwide shortage in mohair, new markets are emerging. And with lamb, sheep and cattle prices high, farmers are looking for alternatives.

“We just need to compete with that top-of-mind awareness, so farmers know what the market is, what they need to do and what the return on investment is,” says Nick. “For instance, you can easily buy an angora goat for $150 to $180 and you should be able to make that back in a year.”

While Covid-19 smashed many industries, it’s been good for mohair. 

“The knitting market has exploded. Across the world, more people were at home and doing craft. Also, fashion trends have seen more big brands offering mohair jumpers and cardigans, liking the look and the fact improved genetics have bred out the itchiness.”

Nick Gorrie, President of Mohair Australia

At present, Australia produces just one to two per cent of the world’s mohair. “I think we’re an industry that could grow 20 per cent a year without causing any impact on demand or changing the pricing,” Nick says. 

“There’s not enough mohair being produced plus people like natural fibres and the qualities of mohair, such as its ability to take dyes well and to bounce back and not crease.”

In addition, high-end buyers are keen to buy from and pay a 5-10 per cent premium to growers who’ve met Responsible Mohair Standards.

This covers both animal welfare and looking after the land with a large number of Australian growers now having RMS certification.

Nick believes there’s further room for opportunity in sales of angoras. “It’s an area in which we haven’t performed very well. If you’re selling all your surplus animals to the abattoir that’s a waste but some growers have been doing that.

“We don’t tend to send goats to saleyards and that’s an area we need to improve on. Those saleyard agents are well networked and we miss out not being involved in that network.”

He was pleased recently to see an entire stud sold to a sheep farmer in the Wagga Wagga district which saw a new grower established, but he wants to see more of that. 

“The more growers you have, the better, because every two or three years you need to change your bucks and we haven’t got that commercial base,” he says.

Mohair farmers reaping the rewards

So, what kind of farmer might like to look at angora goats?

“If you’ve already got the infrastructure like shearing sheds, yards and shelter, it’s ideal,” Nick says. “Angoras don’t graze pastures very heavily so, in rotation with other livestock, they can be good because they’re looking for different things in pastures.

“Older goats can utilise marginal, hilly land and although it’s best to start slowly and build up your skill set, you can increase herds very quickly when the market is strong. Goats often have twins so, with one or two kiddings, you can capitalise on good fibre prices.”

Nick went to a school in the Hills of Hall region that had angora goats, so he got interested in them there. When he left school, he was going to buy a horse but decided to buy four angoras instead. He now has around 1,000 of them.

“At the start, we ran it as a bit of a hobby but we’re now a commercial operation and I own a farm of 170 hectares, plus rent some land from a neighbour,” Nick says.

“We sold $72,000 worth of mohair last year off basically 500 goats, plus I then kidded another 300 and kept my wethers from the year before as well as sending older wethers to the abattoirs where prices for goat meat are good. It’s pretty phenomenal.”

Nick Gorrie, President of Mohair Australia

Nick says that they are very rewarding animals, especially the kidding. “The babies are so gorgeous when they’re little.” 

Getting ahead with mohair mentoring

Grant Forsdick from Burragate is originally from South Africa, the capital of angora goat farming. “We were actually part time fruit farmers but after the farm was acquired by the government, we decided to start again in Australia,” he says. 

“I didn’t even think about angora farming but when we bought Currajong Common, the vendor said we couldn’t have it unless I took the 160 goats as well.”

Grant decided to give it a go and found a very good mentor whose breeding advice has allowed him to seriously improve the quality of mohair he produces.

“I’m involved in the Weaving Project so what we do is slightly different to traditional mohair producers,” he says. “Our mentor identified that the top of the market wanted a longer fibre. You get a premium price for that, especially if it’s very fine. It means I shear at seven months instead of six.” 

At the last assessment, 100 per cent of Grant’s kids’ fibre were approved for the Weaving Project, meeting the criteria for purity and length. They all produced sub-20 micron fibres. 

“We improve price further with RMS certification and at the last sale, the best RMS fine kid mohair sold for a premium,” Grant says. “My wife Jenny and I currently have 400 adults and 110 kids across 42 hectares, and we really enjoy them. 

“We apply regenerative farming practices and they’re so smart, they’re easy to move. All we do is call and shake a bucket of feed and they go.” 

Grant Forsdick, Chairperson of the Australian Mohair Marketing Organisation

Because the couple shear twice a year, they find themselves better off when it comes to cash flow than when dealing with sheep, although goats are more difficult to shear because they have thin skin and less body fat. 

“They’re lighter and more docile and shearing takes a bit longer so we have to pay a bit more for shearing,” Grant says. 

“I’m Chairperson of the Australian Mohair Marketing Organisation (AMMO) so one of our current challenges is how to increase qualified goat shearers.”

Learning as they go

Nolani McColl and her husband Peter are from Braidwood and they decided to buy angora goats after meeting Grant Forsdick at a holistic management course. 

“We visited his farm and ended up buying our first pregnant does in June 2021,” Nolani says. “I like the fact that goats are a small animal so I can handle them, and I also like the structure of the industry. We can focus on growing and then, once they are shorn, we can send the fibre to AMMO and they dealt with the selling.”

Nolani is interested in spinning and textiles so in the future she’d like to sell into the home spinners market.

“Angoras’ fleece is so beautiful – it has a lustre and takes natural dyes really well. Unlike sheep wool, it’s a solid fibre.”

Nolani McColl, angora goat farmer from Braidwood

“Although I work for the Mulloon Institute (an environmental and sustainable research resource for farmers), we don’t have farming backgrounds but we’ve had lots of help from Grant and Nick plus our local shearer David Lillis who is on the AMMO board and focusses on angoras.”

The couple say that getting the goats has been very satisfying, and now they have a herd of 95. 

“We haven’t got a return on them yet as things such as infrastructure, buying equipment and intestinal worm drenches have been expensive,” Nolani says. “I’m hoping that down the track, we’ll get ahead but that’s not why we’re doing it. We had 37 hectares and it seemed unconscionable to have land and not use it.”

If you enjoyed this feature on mohair, you might like our story on diversification for wool growers.

The post A great yarn about mohair appeared first on The Farmer Magazine.